Economic development

Economic development is a key ingredient of the overall sustainability of communities. Areas already identified for housing growth are places where new residents will have opportunities to access employment locally. However in the long term communities will need their own strategies for ensuring that all residents have opportunities to develop their skills and competencies.

Lessons Learned

People need fulfilling jobs to access a more prosperous future. The role of local education and skills providers will be crucial to the long-term success of new communities.

See: Castle Vale

Local schools with a record of high achievement will be a particularly attractive reason for young families to move to a new community and to settle in the longer-term.

See: Manchester

Questions to consider:

  • Where are the new residents going to work?
  • What sort of workers are going to be attracted to live in the new development - new graduates, family builders, manual workers, low waged and unskilled, senior and future senior executives - and how will they make their contribution to sustainable growth?
  • What evidence is there to suggest that the new developments will be a positive factor in attracting new business to the area? And what sorts of businesses are likely to be attracted?
  • Where will the new residents spend their money? Locally or remotely?
  • Will the new development improve the employment opportunities for existing residents? How?
  • What will the construction and related activities do to the local economy? And what happens when the building work is finished?
  • What scope is there for establishing social enterprisesGlossary: Social enterprises are profit-making businesses set up to tackle a social or environmental need and community-owned businesses to employ local people and reinvest the profits into community facilities?
  • How might stewardship organisationsGlossary: are organisations, sometime charitable, that have a specific role to manage community assets into the long-term for the benefit of the local population as a whole help people to develop their employment prospects?

Each new settlement should have an economic strategy and should be able to tell a story about its purpose (or purposes) from an economic point of view. Understanding this rationale will help those involved in building a community to respond better to the needs and aspirations of its residents.
New residents will be attracted to a new development for a number of reasons which might include:

  • affordability of the housing
  • accessibility to a place of work and/or place of cultural significance, through good transport links
  • quality of the place
  • quality of the residential offerGlossary: a composite of housing factors which inform an individual’s or household’s choice over where they live
  • the desire to make a new start in their own lives or to be part of something new
  • there is evidence to suggest that the quality of placeGlossary: the sum of the factors which together make somewhere an attractive place to live - including the quality of the residential offerGlossary: a composite of housing factors which inform an individual’s or household’s choice over where they live - is a factor in choice of location both for businesses and for individuals, particularly for workers in the knowledge economyGlossary: a 'knowledge-based economy' refers to the use of knowledge-based technologies and services to produce economic benefits. New towns need to be quite large (between 150,000 and 300,000 population) if they are to attract employers.

Where there are existing residents, they must also be part of the economic story for the place. This could take the form of more affordable housing options for young people growing up there - which may help to retain a workforce - or it might take the form of better opportunities for employment and skills development, for example.

Growth areasGlossary: There are four growth areas in England, which were outlined in the government's 2003 Sustainable Communities Plan. These are geographical areas where a substantial proportion of new housing will be built


, growth pointsGlossary: Growth Points are areas identified by the central government department of Communities and Local Government (CLG) as being suitable for housing development. and eco-townsGlossary: are proposed new towns of up to 20,000 homes which are intended to be best-practise examples of environmentally friendly development

The four growth areasGlossary: There are four growth areas in England, which were outlined in the government's 2003 Sustainable Communities Plan. These are geographical areas where a substantial proportion of new housing will be built


- Thames Gateway, Milton Keynes/South Midlands, Cambridge-Stanstead Corridor and Ashford - were partly chosen, in 2003, because of their accessibility to economic centres. All of them are also planning for economic growth within the development area.

Proposals for new growth pointsGlossary: Growth Points are areas identified by the central government department of Communities and Local Government (CLG) as being suitable for housing development. were invited from areas that could make a good case for accelerated economic and housing growth where this could be shown to relieve pressure on high demand areas and tackle affordability issues. These have since been joined by a second wave of additional growth pointsGlossary: Growth Points are areas identified by the central government department of Communities and Local Government (CLG) as being suitable for housing development. .

The eco-townsGlossary: are proposed new towns of up to 20,000 homes which are intended to be best-practise examples of environmentally friendly development programme is looking for an economic strategy and travel plans for each of the locations currently being explored. This will mean exploring the business potential in the settlement to nearby towns, encouraging home working, support for new local businesses and high quality transport arrangements including to places of work.

Some economic stories might include, for example:

Improving affordability of housing to service economically active, high pressure areas

Building more homes (including affordable homes) in areas where house prices are very high can be a conscious effort to improve affordability for workers in the area who are on low to medium incomes - whether they are first time buyers or looking to move into a different home.

Where the new housing is close to key economic centres, this will keep commuting distances down and the provision of short distance transport facilities such as cycle paths, pleasant walkways, trams and bus routes should be considered.

Where the new housing is located in an area that is remote from the main economic/employment areas, the future function of the area needs to be considered. Will it mainly be a residential area? Or will it aim to expand its own economic relevance - above and beyond retail and leisure facilities? Given that many of the new residents will commute, there needs to be provision of longer distance transport facilities to link the area to the key employment centres in order to keep carbon emissions down. If these are areas where high numbers of families are expected to live then ensuring adequate provision of easily accessible childcare and schools will be important.

Improve the residential offerGlossary: a composite of housing factors which inform an individual’s or household’s choice over where they live to attract new business and boost economic activity

In some places, housing growth is seen as a means of attracting new 'knowledge economyGlossary: a 'knowledge-based economy' refers to the use of knowledge-based technologies and services to produce economic benefits' businesses and employees to an area. This is particularly the case in places where the traditional industries have declined and new economic futures are seen - at least in part - as the way to improve the fortunes of people living in an area.

In these instances it will be important to actively manage the marketing of the area to ensure that new businesses really are committed to establishing themselves in the area. This might include discussions with senior executives in specific industries to find out what they want in their new business location.

It is also imperative that the plans for the future local economic and housing growth are recognised in broader based economic strategies, and support regional strategies rather than competing with neighbouring areas.

Develop the place as part of a larger economic area such as a City Region or technical hub

Two examples of this scenario are:

Aylesbury where over 16,000 homes are planned alongside office / employment space as part of the Milton Keynes / South Midlands growth area. The rationale here is to boost Aylesbury's position in relation to the Oxford to Cambridge arc by generating more high tech employment opportunities.

Sheffield City Region has a 20 year economic development plan to realise its potential contribution to the growing economy in the North of England. Positioned between Manchester and Leeds it is a gateway location with opportunities for developing efficient transport links and effective economic links in the UK, Europe and internationally. In these instances, the primary driver is economic development across the whole area (not just the cities). New housing and community developments within such areas need to be clear about how they are supporting that economic development agenda.

Elements within this ingredent:

1. Developing the workforce

From building homes to running a development trust, new communities provide job opportunities.

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2. Employing local people in construction

On-site training offers a chance to invest in local individuals, the community, and the construction industry itself.

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